LABOR AND EMPLOYMENT ALERT Septeember 2010
Florida Court Upholds Enforceability of Non-Compete Agreement Against Employee Who Started Tattoo Business
As most Florida employers are aware, they may require that their employees sign non-compete agreements as a condition of becoming employed or, for existing employees, for remaining employed. The enforceability of non-compete agreements is traditionally the subject of much litigation, both at the trial court and appellate court levels. In Atomic Tattoos v. Morgan, Case No. 2D10-831 (Fla. 2d DCA 2010), an employer sought to obtain a temporary injunction against one of its former employees who went to work for a competing tattoo parlor. The trial court denied the employer’s request; however, the Second District Court of Appeal reversed the trial court’s decision, finding, among other things, that the employer was harmed by the employee taking the company’s customer list and by the employee soliciting customers of his former employer (25% of whom went with him to his new operation).
Atomic Tattoos makes clear that non-compete agreements are alive and well in Florida. Employers who utilize non-compete agreements should be prepared to enforce them if actually harmed by employees leaving and competing elsewhere.
This opinion may be found at the following link:
http://www.2dca.org/opinions/Opinion_Pages/Opinion_Page_2010/September/September%2010,%202010/2D10-831.pdfIncreased Protection and Incentives for Whistleblowers in the Financial Industry
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“the Dodd-Frank Act” or “Act” ) recently signed into law offers new monetary incentives and a new private right of action for whistleblowers in the financial service industry. One of the most notable incentives under the Act includes whistleblower awards ranging from 10 to 30 percent of the monetary sanctions collected from a company if certain criterion is established. Additionally, the Act creates a new private right of action for retaliation resulting from lawful whistleblower acts and increases the protections offered to whistleblowers under the Sarbanes-Oxley Act of 2002. The Act applies to all employers, not just public companies like many financial regulatory statutes.
Blackberry and Smart Phone Use under the FLSA
On May 24, 2010, a City of Chicago Police Sergeant filed an action in the Northern District of Illinois pursuant to the FLSA seeking overtime pay for the time spent using his Blackberry smart phone outside of his regular weekly schedule. Allen v. City of Chicago, Case No. 10-CV-03183 (N.D. Ill. 2010). The lawsuit also seeks to establish a class of similarly situated City of Chicago Police Sergeants who allegedly were not paid for such overtime work above their hourly pay. No specific amount of overtime is claimed, but the lawsuit also alleges the City of Chicago failed to keep proper records of the overtime claimed. Although the record-keeping claim has not been determined, it is likely Plaintiff and any class Plaintiffs will use the information stored on their smart phones to create a record of when e-mails and other messages were received and when responses were generated. Claims similar to those alleged in this lawsuit have been made in Wisconsin by real-estate agents, as well as sales representatives of a cellular service provider. To date, no such claim has been adjudicated on the merits. It is likely this will be an area of litigation that could affect a significant number of employers who provide smart phones to their employees and require employees to be available to respond after normal working hours.
The Complaint may be found at the following link:
http://www.npr.org/documents/2010/august/blackberry_suit.pdfThe Fair Playing Field Act of 2010
On September 15, 2010, Senator John Kerry and Representative Jim McDermott introduced the Fair Playing Field Act of 2010 (H.R. 6128, S. 3786). The Act is designed to prevent employers from “misclassifying” employees as independent contractors. Specifically, current laws allow employers to classify workers as independent contractors for federal tax purposes regardless of their actual status (i.e. employee or independent contractor), as long as they have a reasonable basis for doing so. According to a press release issued by Senator Kerry, the Act will:
- require the Secretary of Treasury to issue prospective guidance clarifying the employment status of individuals for Federal employment tax purposes;
Senator Kerry’s press release is available at the following link:
http://kerry.senate.gov/press/release/?id=cd7f5a6e-7feb-41ae-8e8f-6004669821fcThe full text of the Act is available through The Library of Congress’ website:
http://thomas.loc.gov/home/bills_res.htmlEleventh Circuit Issues Opinion on Motor Carrier Act Exemption (FLSA)
In Abel v. Southern Shuttle, Case No. 10-10659 (11th Cir. 2010), a shuttle driver for an airport shuttle service sued his employer claiming that he was entitled to unpaid overtime compensation under the FLSA. The issue in the case was whether the shuttle driver fell within the FLSA's Motor Carrier Act (MCA) exemption. The Court ruled that the airport shuttle service was subject to the Secretary of Transportation's jurisdiction under the MCA and noted that “the purely intrastate transport of passengers to and from an airport may, under certain circumstances, constitute interstate commerce and thus bring the transportation company within the jurisdiction of the Secretary of Transportation.” Additionally, the Court found that the shuttle driver’s business-related activities directly affected the safety of operation of motor vehicles in the transportation on the public highways of passengers or property in interstate or foreign commerce within the meaning of the MCA. Summary judgment granted in favor of the shuttle driver employee was affirmed on appeal.
The Abel v. Southern Shuttle opinion is available at the following link:
http://www.ca11.uscourts.gov/opinions/ops/201010659.pdfEleventh Circuit Addresses Religious Discrimination
In Alansari v. Tropic Star Seaford Inc., Case No. 09-12714 (11th Cir. 2010), Plaintiff appealed the Northern District of Florida’s grant of summary judgment in favor of his former employer on his claims of discrimination, hostile work environment and retaliation. Plaintiff based his claims of religious and racial discrimination on the fact that he was the only African-American employee who was also a Muslim, and because he was subjected to discriminatory comments about his religion from other employees. He also alleged that he was given the least desirable routes and the oldest truck in the fleet, which had many safety problems that Defendant refused to repair.
The Court affirmed the judgment below, holding that the Plaintiff failed to identify a comparator that was similarly situated and thus was unable to establish a prima facie case of disparate treatment based on his religion or race. Furthermore, while the behavior that Plaintiff was subjected to while at work – including solicitations to go to church, comments about his religion, and playing of Christian music on the radio – may have been unwanted and even derogatory, it did not rise to a threatening or humiliating level.
The Eleventh Circuit’s Opinion is available at the following link:
http://www.ca11.uscourts.gov/unpub/ops/200912714.pdfPAST ISSUES OF SLF LABOR AND EMPLOYMENT ALERT
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